I'm running RaspBMC RC3 on my Model B 256 MByte board via a 32 GByte USB Stick.
It does work pretty good with the MPEG2 license but there seems to be some kind of horizontal banding on fast movement not sure what is causing it. Could be the DLNA Stream or the PI but it's not too distracting.
Ahhh figured it out, XBMC is not switching to the native stream resolution thus it's getting up scaled by the gnu. Picture looks perfect now!
I also noticed I was able to watch copy-freely in the Premium folder but not the copy-once. Trying to view a copy-once will just timeout and this is probably because XBMC doesn't support DTCP-IP.
My settings will void your warranty bit:
hdmi_force_hotplug=1
hdmi_drive=2
hdmi_force_edid_audio=1
hdmi_group=1
disable_overscan=1
decode_MPG2=0x00000000
decode_WVC1=0x00000000
gpu_mem=128
boot_delay=1
force_turbo=1
arm_freq=1000
gpu_freq=333
core_freq=500
sdram_freq=600
current_limit_override=0x5A000020
over_voltage=6
